Sharing power by sharing money: the evolution of collaborative funding in Enspiral
Enspiral is a network of entrepreneurs and freelancers whose mission is to help more people work on stuff that matters. Since 2013, we have been practising collaborative funding to allocate collective funds through a participatory process. As the network’s needs and realities have changed over the years, this practice we call ‘cobudgeting’, has evolved alongside it.
This article gives an overview of how the Cobudget tool and practice are used in Enspiral today, and shares some lessons from our more recent experiments.
A quick history of Cobudget
The Cobudget software was born from the Enspiral Network itself, so I thought it would be worth sharing a quick flashback to its origin story! Back in early 2013, members of the network were putting 20% of their income into a collective pool. This went to cover basic operating costs of the network, but soon a surplus was generated. Rather than having a small team of people decide how to spend those funds, they wanted it to be a collaborative decision. So the question became: how do we decide how to spend our monthly surplus budget in a participatory yet efficient way?
Inspired by participatory budgeting processes they had seen in another community, Alanna Irving and Joshua Vial created the first version of the ‘Collaborative Funding’ model that Cobudget is based on today with a spreadsheet and a form. In Alanna’s words, they created Cobudget because
“Enspiral needed an accessible, engaging process that allowed everyone to meaningfully engage with the budget regularly, and have real control over the funds they were contributing, without overtaxing their valuable time and energy.”
Since Enspiral was teeming with web developers at the time, it did not take long until Charlie Ablett and several active Enspiral members turned the spreadsheet into an open source software tool, which made this process available to other organizations around the world. The Cobudget we use today was the second major version of the tool, developed by Derek Razo, Alanna Irving and Eugene Lynch in 2015, and has been iterated since then by Kate Beecroft, Michael Arnoldus, Jessy-Kate Schlinger and Juliana Lopker.
Cobudget in Enspiral today: challenges & new experiments
When Enspiral shifted away from people invoicing for their work through the network and contributing a percentage of their monthly income to a collective pool, the funding model for Enspiral foundation changed. Today, Enspiral is funded through monthly membership fees and contributions from companies that are part of the network, so-called Enspiral Ventures (read more about this transition in Better Work Together). Members and ventures can choose to contribute additional funds to the common pool, which are allocated through our collaborative funding process, usually using Cobudget (but not exclusively!).
When I became more involved in Enspiral a few years ago, we observed several challenges around Cobudgeting that my team at Greaterthan were interested in addressing:
We were funding lots of small stuff that was more ‘nice to have’ than critical. People were proposing and funding projects (called ‘buckets’ in Cobudget) regularly, but few of them were highly strategic to the network as a whole. Examples of this were paying for someone to attend a conference, subscriptions to a newspaper, branded t-shirts, food for a team event, etc.
Strategic conversations about how to best spend our money were not happening enough. Because of the absence of conversations on financial strategy in a visible place, I remember thinking that the really important decisions must be happening somewhere else. There was a feeling of mystique around it — there must be a back room where people are making those decisions. But in fact, they were not happening at all!
Engagement and attention were dispersed. The issue was not that people were not engaging at all, but that it was hard to get enough focused attention from the network to gain momentum. Managing these limited attention spans is not only a challenge when it comes to finances, but all areas of work in Enspiral. This “engagement challenge” is not limited to Enspiral, but is, from my experience, one of the most difficult issues networks and communities face.
The timing of a proposal was too important for its likelihood of success. Most of the time there was a continuous trickle of project proposals, rather than many at once. This made it hard to compare them between each other and decide which activities need to be prioritized over others, which is the whole point of budgeting. Often, you would have just funded a proposal, when a new one would appear that you would have rather funded instead. This in turn created funding inertia, because you are always waiting to see if a “better” project proposal comes up next.
Funds were getting ‘stuck’. Over time an increasing amount of funds accumulated in people’s personal accounts and were not being spent on projects. While we acknowledged that it is important to be able to deliberately “save” your funds and wait for the right project, it was hard to know whether someone was saving or just disengaged. We lacked clear policies and a process that ensured funds would keep moving through the system.
New Experiments: facilitated Cobudget rounds
At the heart of it, these challenges led us to two questions:
How can we enable more strategic thinking and conversation in the network about how to spend our money?
What structure for our Cobudgeting practice will give us the momentum and focused attention from the network we need to make timely, good decisions?
To address these, two years ago we re-introduced a concept that had existed when Cobudget first started — the Cobudget “Round”. Using a process of time-boxed rounds (rather than a continuous process with no beginning, milestones or end) allowed proposing and funding projects to happen in waves. Within a short amount of time, lots of people’s attention is focused on what’s happening in Cobudget and everyone knows when to post their proposals. Having this rhythm is also a great way to establish a cadence of community-wide conversations about financial strategy, which we have been holding at the beginning of each round through both online, asynchronous conversation (via Loomio), as well as live calls for synchronous discussion.
Other elements we have introduced are:
- Choose a theme for each round, to guide its overall direction. Examples could be “Enspiral Core Work”, “Crazy ideas that can increase our impact”, etc.
- Have a round facilitator, who guides the group through the steps of the process and helps keep the momentum of proposals and money moving through the system.
This is the structure of a typical Cobudget round in Enspiral:
Idea Phase: we kickoff a conversation in our online forum Loomio about the theme of the Cobudget round and have strategic discussions about how to best reach that objective. People start putting up their buckets (=proposals in Cobudget) and discussing those of others.
Funding Phase: people start allocating their funds to the buckets. New ideas can still be added. There is a final cut off date after which no new buckets can be added.
Closing & Reporting: The round is officially closed and we move to paying out the buckets and reporting on deliverables once the work is complete.
Since this new phase of experimentation started, we have run three Cobudget rounds, spending approximately 40,000 USD. Though this is my subjective opinion, I can see a clear change in what we funded in our last round in comparison to when we started. We funded fewer, larger, more strategic initiatives. After having facilitated various conversations about what it is strategic for Enspiral to fund, the ideas for those initiatives emerged quite naturally.
Getting better at strategic network conversations and having them more often is a challenge for Enspiral, as well as most other networks I know. “How to do strategy in a self-organized network” is a question I have been holding for a long time now, with no clear answer yet. We still have a lot of work to do on this, but I am proud of the changes we could see after only three Cobudget rounds in how financial strategy was being discussed.
If we take the projects that were funded in our last round as indicators for the current strategic priorities of the network, they are:
- ensuring the sustainability of our annual gatherings as pillars of the network;
- increasing our impact through better communications about Enspiral, our work, and its impact (through an impact report, by boosting sales for our book and online learning academy);
- encouraging more open source experimentation;
- and raising grants to fund Enspiral activities.
The conclusion: keep practicing!
The experience of Cobudgeting in Enspiral has reinforced my opinion that doing collaborative funding well requires a lot of practice.
Running one Cobudget round is like learning Agile and only doing one Sprint.
You will get some results, but to really reap the benefits, you need to go through multiple cycles to integrate what you are learning. Especially if you are looking to grow a new culture and start seeing behavioral change, time and continuity are of essence.
And let’s not forget that there is no silver bullet to make collaborative funding work. The rounds model has its drawbacks as well — not all proposals are suited to this type of funding rhythm. If there is a highly time-sensitive proposal, having to wait until the next round may not be an option.
….and so the experimentation with collaborative decision-making models for different budgeting needs continues….